Facebook is building a phone, says TechCrunch. Facebook is not building a phone, says Facebook. Facebook might not be building a phone but might have someone else build a phone that deeply integrates Facebook, says everyone else (including TechCrunch).

Here’s how it’ll probably shake out.

Facebook will not build its own phone. Facebook, as a company, won’t go to the trouble of designing its own hardware handset. TechCrunch didn’t make that assertion, though Facebook’s response made it sound like they did.

Google thought about all the stuff they’d want to put inside their ideal phone and then commissioned HTC to build it. There was probably plenty of back and forth between the two companies about what was feasible, cost-effective, and necessary, with the end result being a cool phone that had a nice screen and got all the Android updates first. As a phone, though, it wasn’t light years ahead of all the other phones on the market.

So if Facebook “built” its own phone, it might follow the same path as Google. HTC is a good company to partner with and Android could be a viable option as an underlying operating system.

Current Android phones require a Google account in order to be activated. Once you log in with your Gmail address and password, the phone pulls down all the contacts you’ve stored in Gmail and the built-in mail application features all the Gmail bells and whistles like starring and archiving messages.

Imagine the same setup, except you use your Facebook username and password to activate the phone. Once it’s up and running, the e-mail app has direct access to your Facebook messages, contacts, and so forth.

Instead of Android, though, Facebook could go with—GASP!—Windows Phone 7. Why? Because Microsoft owns part of Facebook. Not a very big part at all, but part nonetheless.

Windows Phone 7 isn’t “open” like Android, though, so the idea of a Windows Phone 7 handset that didn’t look and feel like all the other Windows Phone 7 handsets is a bit of a stretch. That being said, Facebook is popular and Microsoft needs Windows Phone 7 to be a hit. And don’t forget that Windows Phone 7 already integrates several Facebook-specific features.

The bigger issue, though, is how much demand there’d be for a Facebook-centric phone. Do enough people use Facebook as their primary source of communication to support a device that puts Facebook first? Maybe. But most smartphones already have Facebook applications that work just fine.

Where Facebook would truly integrate into its own phone’s operating system would be with contact management, messaging, photos, and perhaps its own app store where you paid for everything with Facebook credits.

If it really wanted to dig its claws into everything, it could build its own mobile web browser with “Like” buttons everywhere and run all the searches through Facebook first. For example: “You searched for ‘puppies.’ Here’s what your friends like, followed by results from the rest of the web.”

It’d have to be simple and cheap, too. Like what the Kin was supposed to be, except without the ridiculous $70 per month plan. That’s where Facebook could potentially run into the most trouble—trying to convince carriers to charge less per month for service on a Facebook phone than they do for all their other smartphones. If people could buy a $50 Facebook phone with $25-per-month service, for example, it’d be great for Facebook—not so great for the carriers who want to push their more expensive voice and data plans.